With the increasing trend of online share trading in India, the requirement of Demat account has also grown. Now anyone wants to trade in shares online needs to have a Demat account to keep shares. The account holds the shares in electronic form.
The invention of dematerialization of the shares in electronic form has brought the drastic change in the share market and made the hectic process much easier and quick. Unlike in the past where traders had to shout out the prices to buy or sell the shares and had to keep the shares in paper form, you don’t need to get into any such process now; and the credit of all this goes to demat accounts.
Step-by-step process to open a demat account
Today, almost every discount broker and full-service broker offers a demat account or a 3-in-1 account for online share trading in India.
- Find the registered depository
You cannot open a demat account with any financial services provider. For this, you need to find and get in touch with a registered depository participant. You can get the complete list of DPs at NSDL or CDSL websites.
- Download the form
With the increased usage of the internet, life has become much easier. And one of the benefits share traders have got is the facility of opening a demat account online. Once you decide the DP, visit their website and download the account opening form by providing all the required signatures. You also need to provide some documents that include photographs, PAN card copy, bank statement, address proof, and some additional documents as mentioned by the company.
- Wait for the welcome kit
Based on the company policies and the process, it usually takes around a week or two to get the welcome kit. Some of the discount brokers like My Value Trade offer Demat account at zero balance with no obligation of minimum balance. The welcome kit includes your account number, client ID and a password for the initial login process.
- Nominate the nominee
It is advisable to add a nominee when applying for a demat account to enable the person to get the benefits in case of any event of exigencies.
- Start trading
Now you are ready to enter online world of share trading. The benefit of opening a demat account with discount brokers like My Value Trade is that you can invest in shares, commodities and mutual funds from the same account. You can buy, sell and hold shares as per your interest.
The first step in the online trading process is to check the brokerage rate and the other charges. You can use the brokerage calculator provided by the broker to get an estimate of the fees on your volume of transactions. Different discount and full-service brokers have varied plans for intra-day traders and long-term investors. Some offer brokerage as a percentage of the trading volume while some have flat fees like Rs. 10 per executed transaction. Choose a plan that does not eat away all the earning in the share trading.
Besides brokerage, you should also check different charges applicable on demat account like maintenance charges, annual fees, dematerialization fees and custodian fees.